This file provides instructions on how to reproduce the analysis reported in ``Environmental Policy and Directed Technological Change: Evidence from the European carbon market''.


-Software requirements:
The main scripts included in this replication archive are written for R (version 3.1.0), a free open source software package downloadable from http://www.r-project.org/. A script that constructs the patent variables is also included, written for Stata (version 11). The scripts were written and executed in a Mac OSX environment (version 10.6.8).


-Brief description of files in replication archive:
1_Data_description.txt: This text file provides a detailed description of how the data was obtained and processed. The user will not be able to completely reconstruct our data sets from published files, since license agreement prevent us from publishing much of the raw data. This text file is provided instead as a complement to web appendix A.

2_Constructing_patent_variables.do: This Stata script allows the user to re-construct the patent variables used in our subsequent analysis. A more detailed description of how this script was used in the construction of our data set can be found in 1_Data_description.txt.

3_Matching.R: This R script constructs the data sets used in sections 3, 4, 5, and web appendices D and E of the article. The data files called by this script cannot be shared due to license agreements. This script is therefore provided for auditing purposes, as a complement to appendix B. A public version of the output written by this script is provided in EUETS_innovation_public.Rdata.

4_Descriptive_analysis.R: This R script reproduces the descriptive statistics and graphs from section 3 of the article.

5_Analysis_of_matched_diffs.R: This R script reproduces the estimation and graphs from sections 4 and 5, and appendices D and E of the article.

EUETS_innovation_public.Rdata: This workspace contains data sets that will allow the user to reproduce most of the analysis reported in sections 3, 4, 5 and appendices D and E of the article. All data held under license has been removed, thus preventing complete replication. See 1_Data_description.txt for a basic documentation of the data.